The Watcom shopping index fell to 464 in the eleventh week of this year from its annual International Women’s spike on March 8 of 501, but so far the impact of the coronavirus (COVID-19) has not made itself felt on foot traffic in Moscow’s leading malls.

The Watcom shopping index, which makes use of security cameras in malls to measure foot traffic in real time, has been down over the last three years. However, this year’s results are little different to those in 2019 and 2018. Overall the foot traffic in the leading malls in the capital has been trending down as more and more Russian shop online and so far this year is no different; the results post holiday-weekend shopping this year are almost identical to those of last year.

However, experts are confident that both the index and retail turnover will fall more steeply from here. The rise in real incomes in December as the 12 national projects get under way was supporting consumption in the last quarter of 2019 and spilled over into January this year.

But the double whammy of collapsing oil prices and the growing coronavirus (COVID-19) pandemic will clearly hurt the Russian economy. The expected 1.7% growth for this year will now turn into a 1% contraction, according to the latest forecast by the Bank of Finland Institute for Economies in Transition (BOFIT) and real income growth will turn into yet another contraction.

The full impact of the virus in Russia is hard to estimate. Russia has suspiciously low numbers of infection compared to its neighbours and while the epidemic in Russia is only just getting underway there are already allegations the authorities are under reporting the number of cases in order to be able to hold a referendum on constitutional reforms proposed by Russian President Vladimir Putin that are slated for April 22.

The authorities have taken some recautions, but most of the measures introduced so far are for an economic aid package for business like tourism, small and medium-sized enterprises (SMEs) and airlines. None of the major cities are on lockdown, although rumours continue to swirl that Moscow could be locked down any day.

The population is clearly nervous and while the government has been assuring the population that Russia is relative unaffected, the shelves in supermarkets have been cleared of durable foodstuffs.